Offshore wind must be subsidy-free soon, says Scottish Power

The UK’s offshore wind sector needs to become subsidy-free as soon as possible to secure its future within the generation mix, Scottish Power Renewables has urged.

Speaking at an industry event in London chief executive Keith Anderson said that a subsidy-free future “has to be our aim, has to be our ambition and it has to be soon”.

“We want to see subsidies phased out, and for the technology to compete on equal terms with mainstream generation. We can’t expect governments to continue providing support indefinitely, especially in economically constrained times globally,” he said.

Anderson’s rally call to the industry comes less than a week after the government confirmed plans to cut subsidies for onshore wind, a decision which could cost Scottish Power around 1GW of planned onshore wind capacity if it fails to secure a place in the new contracts for difference subsidy scheme.

Anderson said he has “absolute faith” that the cost of offshore wind will continue to fall to reach £100/MWh by the end of the decade and could exist without subsidy, but that the government needs to be clear about its objectives for the sector beyond 2020.

“Asking for certainty is unrealistic – you don’t get that in this industry,” he said, but added that policymakers can still provide clarity over its objective, expected timescales and in what they are trying to achieve.

Despite the cuts made to onshore wind support Anderson said it is “a great time” to discuss with Government what they want to see, over how much time, and at what cost.

Specifically the industry needs greater clarity on the future of the CfD mechanism beyond 2020 both in terms of the frequency of auctions and the amount of subsidy allocated to different technologies.

At the same event energy secretary Amber Rudd said that once conversations with the Chancellor are complete she would be able to confirm the next CfD allocation “within a few weeks”.

Details could emerge in the Treasury’s budget announcement set for 8 July.